1971 (3) TMI 44 - HC - Income Tax

In this application under article 226 of the Constitution, Shri Dhaniram Gupta, the petitioner herein, challenges the assessment order passed under section 144 of the Income-tax Act, 1961, for the assessment year 1965-66, and the notice of demand in respect of the same.

Summary

Issues: Challenge to assessment order under Income-tax Act, 1961 for assessment year 1965-66, Notice of demand, Compliance with notices under sections 142(1) and 143(2), Approval for retention of seized documents, Entitlement to relief under article 226 of the Constitution, Exhaustion of statutory remedies, Violation of principles of natural justice, Active pursuit of alternative remedy, Detailed examination of facts, Adequacy of alternative remedy, Failure of the application.

Analysis:
The judgment by Sabyasachi Mukherjee of the High Court of Calcutta pertains to an application challenging the assessment order under the Income-tax Act, 1961, for the assessment year 1965-66, and the notice of demand. The petitioner, a partner in a firm, filed an individual return of income through a tax firm. The petitioner raised concerns about the service of notices under sections 142(1) and 143(2), contending that they were not served or were impossible to comply with due to seized documents. However, the court found insufficient evidence to support these contentions, as the petitioner had appeared before the Income-tax Officer without contesting the notice's service.

Regarding the approval for retention of seized documents beyond 180 days, the court held that the legality of retention was not the focus of the petition. The petitioner's main argument centered on the entitlement to relief under article 226 of the Constitution despite having filed an appeal against the assessment order. The court emphasized the importance of exhausting statutory remedies before invoking article 226, except in cases of jurisdictional issues, natural justice violations, or fundamental rights infringements.

Citing precedents, the court highlighted that the existence of an alternative remedy should be considered before entertaining an article 226 application. In this case, as the petitioner had actively pursued an appeal, the court deemed it inappropriate to grant relief under article 226. The petitioner's failure to establish violations of natural justice through disputed factual issues further weakened the case for invoking constitutional jurisdiction. Additionally, the petitioner's contradictory actions, such as claiming the alternative remedy was inadequate but subsequently filing an appeal, undermined the application's credibility.

Ultimately, the court dismissed the application, emphasizing that the petitioner was not entitled to maintain the petition under article 226 of the Constitution. The ruling included a stay of operation for four weeks and no order as to costs. The connected chamber application was also not addressed due to the main rule's outcome.